Wall Street Gives Up Early Gains

Tuesday

A drop in the dollar initially gave a boost to stocks Monday, but a strengthening in the currency short-circuited the market’s advance.

Stocks gave up early gains Monday as a rising dollar stalled a rally in commodities and financial stocks fell.

A drop in the dollar initially gave a boost to stocks Monday, but a strengthening in the currency short-circuited the market’s advance. Oil is down $1.16 to $79.34 a barrel on the New York Mercantile Exchange. A gain in the dollar makes commodities more expensive for overseas buyers.

At midday, the Dow Jones industrial average was down 97.64, or 1 percent, to about 9874.54.

The Standard & Poor’s 500 index was down 10.81 points, or 1 percent, to about 1,068.79, while the Nasdaq composite index was down 12.10 points, or 0.6 percent, to 2142.37 .

David Hefty, chief executive at Cornerstone Wealth Management, said the market’s recent gains — major indexes hit their highs for the year last week — will give investors pause.

“Anytime you’re flirting with the top, it’s hard to push through,” Mr. Hefty said. He added that with little economic data due out early in the week, a quiet start to trading is likely.

However, trading will probably pick up throughout the week ahead of the Commerce Department’s report on third-quarter gross domestic product, the broadest measure of the economy’s health. Economists predict the economy grew at an annual rate of 3.2 percent in the quarter, according to Thomson Reuters. That would mark the first quarter of growth after four straight declines.

Investors have been hunting for definitive signs of growth in recent weeks and the G.D.P. report, due out Thursday, would provide the clearest sign yet of how far the economy has bounced back from its depths earlier in the year.

Earnings reports released throughout the week should also provide the insight traders crave. The health of the consumer will be analyzed through the results of companies like Kellogg, Procter & Gamble and Visa. Consumer spending accounts for more than two-thirds of economic activity.

The energy and insurance sectors will also take center stage throughout the week with ConocoPhillips and Exxon Mobil as well as Aetna and MetLife scheduled to release quarterly results.

Meanwhile, bond prices dipped slightly as the government is set to auction more than $120 billion in new debt.

Demand for the new debt will be closely watched for signs that investors are still willing to buy up Treasuries, Mr. Hefty said. Strong demand shows there is confidence in the nation’s economy and markets, he said.

On Friday, American shares faltered as investors dumped stocks and locked in profits after the glow of a week full of strong earnings reports faded.

But markets in Asia found new impetus Monday after South Korea’s central bank said economic growth accelerated to 2.9 percent in the third quarter from the previous quarter — the fastest rate of growth since the first quarter of 2002.

Asia’s fourth-largest economy has been bolstered by government stimulus spending, low interest rates, and a falling won which bolsters exports. Huge stimulus spending also played a part in China’s economic growth accelerating in the third quarter, according to official figures last week.

“It’s a full-fledged recovery in Korea,” said David Cohen, chief of Asian forecasting at Action Economics in Singapore. He described as “dramatic” the economy’s turnaround from the depths it hit late last year as the financial crisis unfolded.

“There is not a great deal of direction in the market,” said Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers,

Oil companies edged higher, helped by the price of crude. Although down slightly on the day, it was still not far off last week’s 2009 high of $82 a barrel. Total rose 0.6 percent, while Shell and BP both advanced 0.7 percent.

A big loser across Europe was ING Groep , one of the world’s largest financial services companies. Its stock plummeted 9 percent after it announced it would split itself in two, spinning off its insurance arm to simplify its business and issuing 7.5 billion euros ($11.3 billion) in new shares to repay state bailout money.

Earlier, in Asia, Japan’s Nikkei 225 stock average rose 0.8 percent to 10,362.62 and South Korea’s Kospi advanced 1 percent to 1,657.11. Hong Kong’s market was closed for a holiday.

Australia bucked the trend with the S.& P./ASX 200 index falling 0.6 percent. In Sydney trading, the coal miner Felix Resources jumped 4 percent after the government approved a takeover by the Yanzhou Mining Company of China.

Oil prices slipped to near $80 a barrel in Europe after last week’s jump to a 2009 high. Benchmark crude for December delivery fell 15 cents, to $80.35 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 69 cents a barrel to settle at $80.50 on Friday.

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